Business

A taxi across Bay Street in Toronto's financial district in Toronto in a 2012 file photo. THE CANADIAN PRESS/Nathan Denette

TORONTO - The Toronto stock market closed lower Monday as investors looked at the prospect of additional sanctions being levied against Russia for its support of Ukrainian rebels who are being blamed for last week's downing of a Malaysian airliner.

The S&P/TSX composite index lost 16.58 points to 15,249.99.

The Canadian dollar was up 0.06 a cent at 93.2 cents US.

New York indexes were also lower but well off the worst levels of the day after President Barack Obama called on Russian President Vladimir Putin to compel Kremlin-backed separatists to allow international investigators unfettered access to the crash site. But he held off on announcing new sanctions.

The Dow Jones industrials lost 48.45 points to 17,051.73, the Nasdaq declined 7.45 points to 4,424.7 and the S&P 500 index was 4.59 points lower at 1,973.63.

The disaster, in an area controlled by pro-Russian separatists, has sparked international condemnation and increased pressure on Russia to stop meddling in Ukraine. Russian officials have blamed Ukraineâ€™s government for creating the situation and atmosphere in which the plane was brought down last Thursday.

There have been calls for another round of sanctions that would target entire industries, but there are worries that such action would serve to undermine what is still a very fragile economic recovery in Europe.

"You have to remember itâ€™s been a low-quality recovery in the first place because, at the end of the day, where is the growth going to come from?" said Brian Belski, chief investment strategist at BMO Capital Markets in Chicago.

"The luxury that America has in terms in coming out of its doldrums in 2008, â€™09 and â€™10 was that the U.S. remains the worldâ€™s largest growth factor in terms of gross domestic product. Europe has a lot of structural issues facing it and these types of things just donâ€™t help."

Concerns about the effect of tightening sanctions also hit stocks of big American multinationals. For example, General Electric fell 1.8 per cent to US$25.98.

Traders also focused on Israel's ground offensive that started in Gaza at the end of last week.

Israeli Defence Minister Moshe Yaalon said Monday that he is prepared to continue the offensive "as long as necessary" to halt rocket fire and other attacks from Gaza on Israelis.

The energy sector led decliners, down 0.4 per cent even as August crude on the New York Mercantile Exchange rose $1.46 to US$104.59 a barrel.

The TSX gold sector was flat as traders looking for safety pushed August gold up $4.50 to US$1,313.90 an ounce.

The base metals component turned positive, up 0.68 per cent while September copper was up a penny at US$3.20 a pound.

Investors also looked for the pace of Canadian second quarter earnings reports to pick up this week. Canadian National Railways (TSX:CNR) reported after the close that adjusted earnings per share came in at $1.03, three cents better than estimates. Its operating ratio, a key measure of performance where lower is better, moved down to 59.6 against expectations of a reading of 60. CN shares had dipped 13 cents to $72.95 after rising two per cent on Friday in the wake of a strong earnings report from rival Canadian Pacific (TSX:CP).

Note to readers: This is a corrected story: A previous version said the Malaysian plane was shot down last Friday